])
( § ( measure
of the QD
of
of
the
a
responsiveness
good supplied
y
to
changes in its
price
) )
§U y relatively large responsiveness
-
ELASTIC
relatively small responsiveness INELASTIC
-
→
PES =
percentage change in Qty Supplied = % DQS DQS Q final Q initial
PES →
.
= -
-
% DP
percentage change in
price of good QS → Q initial
* PES is always tve be relationship b/w price and Qty supplied DP
-
→ Pfmal -
Pin , Hal
is positive P → Pm , Hal
RANGE OF VALUES
↳ of intersecting elastic it
in the ease curves , flatter the
supply curve the more is at
any given price
PES L I [ supply INELASTIC] PES > I
[ Supply PRICE ELASTIC ]
°
°
is PRICE is
: Yo DQSL % DP ;
quantity supplied is : % DQS > % DP
; quantity supplied is
UNRESPONSIVE to changes in
price RESPONSIVE to
change in
price
Price inelastic supply : PES b Price elastic
a < I supply : PES > I
B when supply curve 's
p
p
s B when supply curve 's end point -
cuts the
end point cuts the n Pz VERTICAL AXIS
/
-
i
- - - - - - - - - - - - - - - - - -
A
Pz
)
- - - - -
- - - - - - - -
.
10% ! HORIZONTAL AXIS 10% p, - - -
- - - - - - - -
• I
l
,
Py - - - - - - - - -
y
. l l
i i : :
l
l l l
l l
l l
l l l l
! I l l
O O
Q1 Q2 Q Q1 Q2 Q
FF
-
15%
P s
PES =L [ Supply ]
°
is UNIT ELASTIC
Yo ( unitary PES) PES O [ Supply INELASTIC ]
°
% DO,
°
DP PERFECTLY
-
=
is
-
.
c Unit elastic supply : PES = 1
:
Yo DQS=0 ( no change in QS no matter DP )
O
QI Q
P s,
P
s
,
* any supply curve
passing
°
PES = A
[ supply PERFECTLY ELASTIC ]
through ORIGIN has PES IS
s
p,
§
equal to
unity
:
any change in
price
=
Infinitely large
O Q
°
change in
quantity supplied
Q
( § ( measure
of the QD
of
of
the
a
responsiveness
good supplied
y
to
changes in its
price
) )
§U y relatively large responsiveness
-
ELASTIC
relatively small responsiveness INELASTIC
-
→
PES =
percentage change in Qty Supplied = % DQS DQS Q final Q initial
PES →
.
= -
-
% DP
percentage change in
price of good QS → Q initial
* PES is always tve be relationship b/w price and Qty supplied DP
-
→ Pfmal -
Pin , Hal
is positive P → Pm , Hal
RANGE OF VALUES
↳ of intersecting elastic it
in the ease curves , flatter the
supply curve the more is at
any given price
PES L I [ supply INELASTIC] PES > I
[ Supply PRICE ELASTIC ]
°
°
is PRICE is
: Yo DQSL % DP ;
quantity supplied is : % DQS > % DP
; quantity supplied is
UNRESPONSIVE to changes in
price RESPONSIVE to
change in
price
Price inelastic supply : PES b Price elastic
a < I supply : PES > I
B when supply curve 's
p
p
s B when supply curve 's end point -
cuts the
end point cuts the n Pz VERTICAL AXIS
/
-
i
- - - - - - - - - - - - - - - - - -
A
Pz
)
- - - - -
- - - - - - - -
.
10% ! HORIZONTAL AXIS 10% p, - - -
- - - - - - - -
• I
l
,
Py - - - - - - - - -
y
. l l
i i : :
l
l l l
l l
l l
l l l l
! I l l
O O
Q1 Q2 Q Q1 Q2 Q
FF
-
15%
P s
PES =L [ Supply ]
°
is UNIT ELASTIC
Yo ( unitary PES) PES O [ Supply INELASTIC ]
°
% DO,
°
DP PERFECTLY
-
=
is
-
.
c Unit elastic supply : PES = 1
:
Yo DQS=0 ( no change in QS no matter DP )
O
QI Q
P s,
P
s
,
* any supply curve
passing
°
PES = A
[ supply PERFECTLY ELASTIC ]
through ORIGIN has PES IS
s
p,
§
equal to
unity
:
any change in
price
=
Infinitely large
O Q
°
change in
quantity supplied
Q
